Vard Terminates Contracts to Build 2 PSVs for E.R. Offshore's Units

Singapore-listed Vard Holdings Limited (the Company) disclosed Friday that on March 12, the Company was notified that two affiliates of E.R. Offshore, our customer, have filed for insolvency at a local court in Germany.

The Company’s subsidiary is currently constructing one platofrm supply vessel (PSV) for each of these companies at its shipyard in Vung Tau, Vietnam. It has received a 10 percent installment for one of the vessels.

On March 13 the Group terminated the two shipbuilding contracts. The Group does not expect to repay the prepayment received, and expects to be able to sell the vessels at a price that will cover the expected construction cost less the prepayment received.

The impact of the termination and the proposed resale is expected not to have a material effect on the earnings per share of the Group for the financial year ending Dec. 31.